Archive for December 26th, 2007

A glut of condominium projects in downtown Winston-Salem and the slowing national economy are causing some developers to change, withdraw or re-examine their projects.

Landex Development LLC, the company that is redeveloping the Brown & Williamson building into the Gallery Lofts condominiums, announced that it might change its focus from condominiums to apartment rentals.Judy Siegel, the chairwoman of Landex, said last week that she is 90 percent sure that Landex will move to rental.“Winston-Salem is a solid, good market,” she said. “It’s just that it’s shallow. With a project this big, that makes the difference.”

Half of the planned 77 condominiums had sold in the past two years, Siegel said. The company was close to its goal of selling the 60 percent of the condominiums required for financing on the project, but sales were taking too long.The project had attracted a mix of 30- to 60-year-old empty nesters, professionals and downtown business people, Siegel said. Letters were sent to the Gallery’s buyers about the possible change, and about 10 people so far have asked for their deposits back.Over the next few months, her company expects to get the financing for a rental project in place, Siegel said.After five years, the building might be converted into condominiums, she said.Elsewhere around downtown, other developers are looking at delays and changes to their projects.

Catherine Mitchell, the vice president of Boulevard Centro, the Charlotte company that is developing West End Village at the corner of Fourth and Broad streets, said that a planned third building, Fourth and Green, is on hold. Sales rates for the first two buildings in the project have been steady. Fourth and Broad, which has a total of 72 condominiums and town houses, is at 85 percent, or about 60 units. At the Towns, which has 54 condominiums, sales are at 55 percent, or about 30 units, she said.“It hasn’t been out of the gate bombarding us,” she said. “Our traffic remains steady.” A good part of recent sales have been second-home buyers, Mitchell said. First-time buyers appear to be having a harder time saving up a down payment to enter the market, she said.

Tammy Watson, an agent with ERA/Piedmont Realty, said that her company is selling the land where Pisco Holdings in Las Vegas had announced plans for 36 condominiums at 575 Liberty St. She said that the developer has decided not to do the project here.She has had a couple of calls about the property, which is about a quarter of an acre. Some people just want the land and others are interested in it for a specific project, she said.

Some downtown observers also have questioned the fate of the District, a group of three to five condominium buildings proposed for Trade Street, Martin Luther King Drive and Liberty Street. The project was announced earlier this year.Chad Davis, the president of East Coast Capital Inc. and the developer of the project, did not return phone calls.Jason Thiel, the president of the Downtown Winston-Salem Partnership, said that changes to development projects are not unusual, particularly in downtown development.Many of the 500 or so housing units that were built in the past five years sold fast because they were based on pent-up demand, he said.“What you’re starting to see is the product start to diversify,” he said. “I think that’s going to be very helpful.”He said he expects to see more apartments, and more housing that is less expensive. Downtown housing tends to cost more per square foot than comparable housing in the suburbs.

The slowdown in home sales nationwide has played a part in the local real-estate market, he said. When people buy a place downtown, they often have to sell their homes first, and that is taking longer.Joyce Snelgrove, a listing agent with Prudential Carolinas Realty, which has two of its six live/work condominiums at Holly Village for sale, said that selling homes has been a problem for some of the buyers she has worked with.The condominiums in Holly Village have work or recreational space on the first floors and living space on the second and third floors.Some of the sales have been to executives from out of state, she said. One of her prospects right now is waiting to sell a home out of state.Snelgrove said she is optimistic about the future of downtown. The baseball stadium is under way, as are other residential projects just beyond the downtown core.

Thiel said that with all of the activity downtown, he expects more retail development to occur, and that will add another layer of diversification to the market.“I think we’ve established that housing works,” he said, “and I think it’s a matter of absorption.”

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